2013 (11) TMI 1474 - AT - Customs

Violation of Notification No. 102/2007, dated 14-9-2007 - Refund of SAD - Whether no declaration of the requirement of para 2(b) of Notification No. 102/2007-Cus., dated 14-9-2007 in the invoices disentitles the appellant-trader to the refund of additional customs duty paid - Conditions mandatory or directory - Held that - A Notification benefit being given at the cost of people of India the condition cannot be said to be directory without being mandatory. Every benefit through notification is granted with conditions, stipulations and limitations to safeguard interest of Public Revenue. When the appellant failed to make a declaration it cannot be said to be a technical lapse where as breach of compliance to the Notification No. 102/2007 debarrs to the benefit granted by that. The spirit of the declaration can be appreciated from the object it is expected to achieve. The declaration envisaged that expression thereof on the invoice shall make the buyer beware that no credit of additional duty of customs shall be admissible and that shall invite attention of all user of the said document. Therefore, such a precaution cannot be interpreted to be a technicality of the notification. It is a mandatory requirement and breach thereof shall disentitle the appellant to the benefit of refund of additional duty of customs. Irrespective of the status of the appellant whether as a trader or a manufacturer that does not bring the appellant to a different footing when compliance to the requirement of Notification stated above is mandatory and not discretionary or discriminatory. Whether subsequent Notification No. 29/2010-Cus., dated 27-2-2010 should be read as clarificatory and retrospective - This is inconceivable for the reason that benefit granted by a Notification operates from the date that is notified and that does not intend the benefit to flow at public cost retrospectively. Therefore grant of the Notification in question cannot be construed to be retrospective in nature - Decided against assessee.

Summary

Issues involved: Interpretation of para 2(b) of Notification No. 102/2007-Cus., denial of refund of additional customs duty, compliance with notification requirements, applicability of subsequent notifications, unjust enrichment, mandatory vs. discretionary conditions for refund eligibility.

Analysis:

1. Compliance with Notification Requirements:
The main issue in this judgment revolves around the compliance with the conditions specified in para 2(b) of Notification No. 102/2007-Cus. The appellant, a trader of medicine, claimed a refund of additional customs duty paid at the time of import. The crux of the matter was whether the appellant fulfilled the requirement of para 2(b) by specifically indicating in the invoice that no credit of the additional duty of customs would be admissible. The appellant argued that a self-declaration was provided to the adjudicating authority, and compliance was evident from the documents submitted. However, the tribunal held that the declaration on invoices was mandatory, and failure to comply disentitled the appellant from the benefit of a refund.

2. Applicability of Subsequent Notifications:
The appellant contended that Notification No. 29/2010-Cus. dated 27-2-2010 superseded the requirement of para 2(b) of the 2007 notification for pre-packed goods intended for retail sale. The tribunal rejected this argument, emphasizing that benefits granted by notifications operate from the notified date and do not have retrospective effect. Therefore, the appellant's plea for retrospective application of subsequent notifications was dismissed.

3. Unjust Enrichment and Compliance:
The appellant relied on various decisions to argue against the doctrine of unjust enrichment, stating that no burden was shifted to the buyers as the refund was claimed by the appellant. Additionally, the appellant cited cases to support the use of a Chartered Accountant's certificate as evidence. However, the tribunal held that the failure to comply with the mandatory declaration requirement on invoices was a significant factor in denying the refund claim, irrespective of arguments related to unjust enrichment or evidentiary support.

4. Mandatory vs. Discretionary Conditions:
The tribunal emphasized that the declaration on invoices was a mandatory requirement, not a discretionary one. It clarified that every benefit granted through notifications comes with conditions to safeguard public revenue. The spirit of the declaration was deemed crucial to alert buyers that no credit of additional duty of customs would be admissible. The tribunal underscored that breach of compliance with the notification's requirements would disentitle the appellant from the refund, regardless of the appellant's status as a trader or manufacturer.

5. Final Decision:
Ultimately, the tribunal dismissed all appeals, emphasizing that the failure to comply with the mandatory declaration requirement on invoices was pivotal in denying the refund claims. The judgment highlighted the importance of strict compliance with notification conditions and rejected arguments related to retrospective application of subsequent notifications or unjust enrichment, reaffirming the significance of fulfilling mandatory requirements for refund eligibility.